Peru oil pipeline remains under siege

Market: Crude oil
07/12/18

State-owned PetroPeru is still struggling to access a segment of its 100,000 b/d northern crude pipeline that was severed by protesters last month.

PetroPeru suspended the pipeline operations on 27 November. Canada's Frontera Energy, which uses the line to move crude from block 192 in the northern jungle, began to shut in wells on 3 December.

Frontera accounted for roughly one-fifth of the 55,000 b/d of crude produced in Peru in November, according to regulator PeruPetro.

Felipe Cantuarias, head of the Peruvian Hydrocarbons Society, said the conflict is not only suppressing production but also harming longer-term investor sentiment.

Frontera's contract for block 192 expires in August 2019 and PetroPeru is looking for an investment partner. Cantuarias said the pipeline attack could keep interested companies away.

The dispute is having environmental consequences as well. Aerial photos from drones show a large oil spill near the Mayuriaga indigenous community in the Loreto region. PetroPeru estimates that more than 8,000 bl of heavy crude has already spilled into the zone around the Morona pumping station along the 1,100km pipeline.

The protests in the community began shortly after 7 October local elections. A group of residents targeted the pipeline in mid-November to call attention to alleged fraud, first by briefly kidnapping oil workers and then sabotaging the pipeline.

President Martin Vizcarra's sent a team to negotiate, but protest leaders rejected the overture, demanding the presence of Peru´s prime minister Cesar Villanueva.

More than 100 police officers have been dispatched to the area, but authorities are wary of sparking violence.

A large-scale protest in June 2009 led to a deadly clash between indigenous protesters and police officers, killing 23 officers and 10 protesters.

At the time, the indigenous groups were protesting legislation to implement a free-trade agreement between Peru and the US, but most of the violence unfolded at a pumping station where police officers guarding the pipeline were killed.

While still dealing with the current Mayuriaga protests, PetroPeru reported on 5 December that members of a second community in Loreto were blocking access to another pumping station along the line. They are demanding additional government funds for environmental remediation.

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US government agencies set to shut down

20/12/24

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20/12/24

US government agencies set to shut down

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Viewpoint: More changes for Dated crude benchmark ahead

20/12/24

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20/12/24

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US Congress passes waterways bill

19/12/24

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19/12/24

US Congress passes waterways bill

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